Summary: In response to a congressional request, GAO provided information on the annual costs of U.S. military and security assistance programs during fiscal years (FY) 1985 through 1988.
GAO found that: (1) a global recession in the early 1980s added to developing countries' debt repayment problems; (2) in FY 1985, a major change in the types of military aid shifted the bulk of the aid to below-market-rate loans, increased the use of forgiven direct loans, and discontinued the use of guaranteed loans; (3) since FY 1985, the United States has forgiven all foreign military sales loans to Israel and Egypt and partially forgiven loans to Pakistan and Turkey; (4) in FY 1988, the United States eliminated the Guaranty Reserve Fund's cash balance to pay $401 million toward interest and principal on $2.6 billion in rescheduled foreign loans; (5) the United States made almost $4.6 billion in payments on scheduled guaranteed loans due to nonpayment; (6) as of September 1988, 29 countries had overdue loans totalling $768 million; (7) the cumulative unreimbursed drawdowns of Department of Defense personnel and equipment to foreign governments or international organizations totalled about $175 million; and (8) the United States waived about $2.7 billion in charges and fees for nonrecurring research and development costs between FY 1977 and FY 1988.
